If it were interactive, the character would have to have head collision to stop them jumping up through ceilings. As this doesn't happen in the rolling demo, it's probably omitted.. Along with alot of other items.

But it does have a full physics engine - they made a big point of it including Ipion in 3DMark2001, and still do for 03. Just because something is non-interactive doesn't mean the optimal route to animation is manual placement of paths. The physics engine is used to calculate objects' movement in 3DMark.